Portfolio management at KLM was a 10 year journey. The trigger for this journey was that IT perceived as too expensive and not unresponsive. In 2001 a new CEO wanted to make structural changes to respond to questions such as outsource or not.
They defined governance principles and practices to align IT and Business. Steven illustrated how these principles are applied when it comes to outsourcing. Portfolio management is implement via the principle of differentiation between HOW (IT) and WHAT (Business)..

…………………………………..WHAT HOWInnovation Business Development Manager Innovation ManagerContinuity Exploitations Manager Business service Manager . Business ICT
The mantra of KLM is “we do IT together”.

How to align the investments to the business goals? The business does not always know how to formulate these goals, but IT can help clarify them. This will allow IT to define the portfolio management prioritization. After 10 year the continuity budget has been reduced and an increased innovation budget.Laurent Claus (Belgacom) – Between the devil and the deep blue sea

Laurent Claus

Once upon a time there was company-wide prioritization process with a lot issues such as comparing apples with pears, big dogs eats first, annually and quarterly discussions. IT ruled the process.

The goal was to achieve clear ownership and accountability. So since 2007, the business owns the budget. There are 4 roles: budget owner sits in the business, steering committee, the project office and the investment committee. But how to prioritize?

Two major lessons were learned: The strategy department is needed as a neutral referee on setting the different priorities and there is a need to focus the attention to create an architectural balance in order to stay away from too many small projects. The role of IT becomes translating the architecture into business stories and secures the budgets to stick to this roadmap.

Centralized approach lead to IT tyranny – decentralization leads to IT democracy. Neither path is the real answer to the solution lies in the middle. So IT portfolio management is part of the alignment of business and IT.

Mobistar has had several attempts to get the portfolio projects right. But 3 years ago, they got right and implemented a portfolio management system called the Odyssey program. The Odyssey program is a framework to structure the portfolio management. There is a mix is of criteria such as growth, customer care, sales and efficiency leading to a number of programs. Each initiative is run by a business owner (at director level, a leader and companywide recognized) and who creates clear objectives.

The odyssey defines a clear link between a set of business objectives under the responsibility of one director and the delivery of a portfolio of projects within a defined budget and resources envelops.

To ensure the delivery of the portfolio, a team is built with a business head of the program and an IT delivery manager. Both share the responsibilities and apply the prioritization based on business benefits vs complexity cost. Clean governance is put in place to make sure the project is schedule with monthly reviews.

Key finding:
• It is a long process and moves forward with small steps
• Central location for all projects
• Find right portfolio: leader and scope
• Implement simple governance tools
• Stimulate regular interaction between business and IT
• Permanent follow up of governance

debate

The debate moderated by Georges Ataya

The debate on portfolio management raised following interesting questions from the audience.
• Who should be accountable for the project?
• How should be the business structure itself for portfolio management?
• Do we have a good Portfolio mix?
• What tools can be used to do portfolio management?